First-time buyers RULE! Matt and I have helped many, many first-timers into their permanent SF digs, and we really love doing so. Handing over the keys is one of the most gratifying parts of working in this business. And the housewarming parties…oh, the housewarming parties. Yes, brand-new homeowners sure know how to party. But that’s a post for another day.
Part of our job is to give our clients — whether they’re first-timer buyers, tenth-time sellers, or somewhere in between — the information they need to (a) know what’s coming next in the process and (b) not freak out. So, let’s assume for the sake of today’s post that you’ve just had your offer accepted on your dream home and now you’re wondering a few things: when you’re going to have to cough up money during the escrow process, and when to give notice to your landlord, for example.
#1: The cash, the dinero, the moolah
When you submitted your offer, you wrote a check for 3% of the offer price as your good faith deposit, and now that’s sitting in escrow where it counts as part of your down payment and closing costs. But, you’re wondering, when will I write more checks?
First up is your property inspections. Depending on the property type, we usually recommend a general contractor’s inspection and a pest inspection. If you’re buying a single-family home, these two inspections will run about $800-$900. If either of these inspectors recommends any further investigation by other trades, keep that checkbook handy. In the rare case that you need the opinion of a structural engineer, plan for about another thousand bucks.
#2: When can I say adios to my landlord?
In the old days (pre-2008/pre-worldwide financial implosion) this wasn’t as important. But now, in the brave new world of lenders flexing their pain-in-the-butt muscles, do not give your notice until you have received full loan approval from your lender. I’ll repeat for clarity: do not, under any circumstances, at the risk of ending up homeless or living in your mom’s basement or under your desk at the office, give notice until your loan is completely approved.
There’s a common belief out there that you can only give notice on the first of the month. Not so. Almost all leases in San Francisco allow tenants to give 30 days’ notice on any day of the month. So, wait for that loan approval, pop a bottle of bubbly to celebrate, and then give notice. Yes, you’ll be paying both rent and mortgage for a few weeks, but it’ll give you time to move, clean up your apartment, and get your deposit back.
Got any specific first-time buyer questions? Leave a comment and we’ll answer them for you.